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$4.99 is a really fair price. As a cheap bastard, I"d even settle to pay 6.99 or 7.99 for a new release. 9.99 isn't TOO bad, but it makes me very leery of buying a book I don't already absolutely need. Making it the price of a paperback would make it more likely people take a chance on your book.
On the flip side, if you make it too cheap off the bat (say. 1.99 or something) you run the risk of people thinking it's cheap FOR A REASON. Don't undervalue yourself. In my opinion aim for the 6.99-8.99 range. You'll make some money, you won't be considered a cheap author, and it's only a minor reduction in price that, if it works, could lead others to follow.
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